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A N A C T
RELATING TO PUBLIC UTILITIES AND CARRIERS
Introduced By: Representatives Kennedy, Lewiss, Barr, Palangio, and D Caprio
Date Introduced: February 27, 2002
It is enacted by the General Assembly as follows:
SECTION 1. Sections 39-1-4, 39-1-8, 39-1-18, 39-1-27.3, and 39-1-27.6 of the General Laws in Chapter 39-1 entitled "Public Utilities Commission" are hereby amended to read as follows:
of commission -- Terms -- Vacancies. -- (a) The public utilities
commission shall consist of
three (3) five (5) electors selected
with regard to their qualifications and experience in law and government, energy
matters, economics and finance, engineering and accounting, and appointed
by the governor with the advice and consent of the senate. At least three
(3) of the five (5) commissioners shall not be, nor shall have been within the
previous five (5) years, an employee, officer or director of any business whose
activities are subject to regulation by the commission, or any affiliate
thereof. The term of each commissioner shall be six (6) years. The director
of administration, with the approval of the governor, shall allocate the
position of each commissioner to one of the grades established by the pay plan
for unclassified employees.
Within thirty (30) days after May 16, 1968, the governor,
with the advice and consent of the senate, shall appoint one commissioner and
designate him or her as chairperson to serve until the first day of March,
1975, and until his or her successor is appointed and qualified, one
commissioner to serve until the first day of March, 1973, and until his or her
successor is appointed and qualified, and one commissioner to serve until the first
day of March, 1971, and until his or her successor is appointed and qualified. Within
thirty (30) days after January 1, 2004, the governor, with the advice and
consent of the senate, shall appoint one commissioner to serve until the first
day of March, 2010, and until his or her successor is appointed and qualified,
and one commissioner to serve until the first day of March, 2008, and until his
or her successor is appointed and qualified. During the month of
February, 1971, and during the month of February biennially, thereafter, During
the month prior to the expiration of the term of a commissioner, the
governor, with the advice and consent of the senate shall appoint a
commissioner to succeed the commissioner whose term will then next expire, to
serve for a term of six (6) years commencing on the first day of March then
next following, and until his or her successor is appointed and qualified. A
commissioner shall be eligible to succeed him or herself. Upon the expiration
of the term of the chairperson, the governor may designate any commissioner as
(c) A vacancy in the office of a commissioner, other than by expiration, shall be filled in like manner as an original appointment, but only for the unexpired portion of the term. If a vacancy occurs when the senate is not in session, the governor shall appoint a person to fill the vacancy, but only until the senate shall next convene and give its advice and consent to a new appointment.
-- Meetings. --
Two (2) A majority of the commissioners
shall constitute a quorum for the transaction of any business, except as
provided in section 39-1-11. Meetings of the commission may be held at any time
or place upon the call of any member, after a reasonable notice by mail or
telegraph to the other members, and shall be held at such times and places as
in the judgment of the commission will best serve the convenience of all
parties in interest.
39-1-18. Hearings and records -- Certified copies. --(a) All hearings and orders of the commission and of the division, and the records thereof, shall be public and as such, any person shall be permitted to record all or any portion of a hearing by way of camera, video or tape recorder of any kind, unless a party to the hearing requests, and the chairperson or administrator grants the request, that such recording be prohibited for the protection of attorney-client privilege, confidentiality or other interest of the parties. All reports, records, files, books, and accounts in the possession of the commission or the division shall be open to inspection by the public at all reasonable times. The division may charge and collect reasonable fees for copies of official documents, orders, papers, and records, and for authenticating or certifying the same; provided that no fee shall be charged for single copies of official documents, orders, papers, and records, furnished to public officers of the state for use in their official capacity, nor for the annual reports in the ordinary course of distribution.
(b) Effective as of September 1, 2003, all filings made to the division or commission shall also be provided digitally in a manner established by the division. The commission may adopt rules exempting filings from this requirement provided that (i) no such exemption shall be made for filings by a state agency or by a utility serving fifty thousand (50,000) or more customers in the state and (ii) any filing so exempted shall be converted to digital format by the division so as to facilitate public access to such filings using the internet.
(c) In order to support the ability of the public and interested parties to stay informed of the activities of the commission and the division, and to promote awareness of utility restructuring, the division shall maintain a site on the internet through which the public may access:
(1) notices of and agendas of hearings;
(2) all filings that are available in digital format and that are not subject to protective orders;
(3) all orders, rules and regulations of the commission or administrator;
(4) announcements of, agendas for, and minutes of open meetings;
(5) a calendar of all forthcoming public meetings and hearings;
(6) current tariffs of all public utilities;
(7) a listing of all public utilities and nonregulated power producers, together with consumer contact information for each;
(8) consumer information on billing dispute resolution, retail access, conservation, and consumer assistance programs;
(9) demand side management programs available to residential, commercial and industrial customers;
(10) other information as the division deems relevant and useful to the public.
Electric distribution companies required to provide retail
access and standard offer. --Electric
distribution companies required to provide retail access, standard offer and
last resort service. -- (a) To promote economic development and the
creation and preservation of employment opportunities within the state, on
July 1, 1997, each electric distribution company shall offer retail access
from nonregulated power producers to all customers. (1) All new commercial and industrial customers, including new
manufacturing customers, commencing service on or after July 1, 1997, with an
anticipated average annual demand of two hundred (200) kilowatts or greater; (2) All existing manufacturing customer with an average annual
demand of fifteen hundred (1500) kilowatts or greater; and (3) All accounts in the name of the state, provided, however,
no electric distribution company shall be required to release more than ten
percent (10%) of its total kilowatt-hour sales to retail access pursuant to
this subsection. (b) On January 1, 1998, all electric distribution companies
shall expand their offer of retail access to include existing manufacturing
customers with an average annual demand of two hundred (200) kilowatts or
greater and all accounts in the name of the cities and towns in Rhode Island,
provided, however, no electric distribution company shall be required to
release a total of more than twenty percent (20%) of its total kilowatt-hour
sales to retail access pursuant to subsections (a) and (b). (c) Retail access shall be implemented for all customers in
Rhode Island within three (3) months after retail access is available to forty
percent (40%) or more of the kilowatt-hour sales in New England including the
total kilowatt-hour sales in Rhode Island; provided however, that if such
retail access in New England has not occurred by July 1, 1998, then each
electric distribution company shall expand its offer of retail access to all of
the electric distribution company's remaining customers. The commission may
extend this deadline for up to six (6) months for some or all customers if it
determines that additional time is necessary to ensure that retail access can
be extended to all customers on reasonable terms. Each electric distribution
company shall notify all customers in its service territory of the options
available to them to procure electric service at lease ninety (90) days before
such customers become eligible for retail access. Upon request from any
nonregulated power producer, an electric distribution company shall make
available a list of the names and addresses of its customers that are, or
within sixty (60) days are expected to become, eligible for retail access;
provided, however, such lists shall not include customers that have submitted
written requests to the electric distribution company that they be excluded
from such lists. (d) (b) Within three (3) months after retail
access is available to forty percent (40%) or more of the kilowatt-hour sales
in New England and extending tThrough year 2009, each electric
distribution company shall arrange for a standard power supply offer
("standard offer") to customers that have not elected to enter into
power supply arrangements with other nonregulated power suppliers. The power
supply contract required for the standard offer shall be awarded by public
competitive bidding to the lowest priced power supplier. The standard offer shall
be priced such that the average revenue per kilowatt-hour received from the
customer for such power together with approved distribution, transmission and
transition charges shall equal the price that would have been paid under rates
in effect during the twelve (12) month period ending September 30, 1996
adjusted annually for eighty percent (80%) of the change in the consumer price
index for the immediately preceding twelve (12) month period, and also for
other factors reasonably beyond the control of the electric distribution
company and its former wholesale power supplier including but not limited to
changes in federal, state or local taxes or extraordinary fuel costs; provided,
however, that adjustments to the standard offer for factors other than inflation
must be approved by the commission. The standard offer is to be a price cap and
may, after notice to the commission, be less than the maximum allowed at
anytime for the generation component of the standard offer. The rates
that are charged by the electric distribution company to customers for standard
offer service shall be approved by the commission and shall be designed to
recover the electric distribution company's costs and no more than the electric
distribution company's costs; provided, that the commission may establish
and/or implement a rate that averages the costs over periods of time. The
electric distribution company shall not be entitled to recover any profit
margin on the sale of standard offer power. The electric distribution company
will be entitled to recover its costs incurred from providing the standard
offer arising out of: (1) wholesale standard offer supply agreements with power
suppliers in effect prior to January 1, 2002; (2) power supply arrangements
that are approved by the commission after January 1, 2002; (3) power supply
arrangements made pursuant to section 39-1-27.3.1; and (4) any other power
supply related arrangements prudently made after January 1, 2002 to provide
standard offer supply or to mitigate standard offer supply costs; provided,
however, to the extent there are any cost recovery matters relating to the
provision of standard offer service that have been deferred and are pending
before the commission as of the effective date of this section, such cost
recovery matters shall be governed by the statutory provisions in effect on the
date of the action of the commission to defer its decision on the cost recovery
matter. Subject to commission approval, the electric distribution company may
enter into financial contracts designed to hedge fuel-related or other variable
costs associated with power supply arrangements and the costs of any such
financial contracts shall be recoverable in standard offer rates. The electric
distribution company's standard offer revenues and its standard offer costs
shall be accounted for and reconciled with interest at least annually. Any over
recoveries shall be refunded and any under recoveries shall be recovered by the
electric distribution company through a uniform adjustment factor approved by
the commission. The commission shall have the discretion to apply such
adjustment factor in any given instance to all customers or to such specific
class of customers that the commission deems equitable under the circumstances
provided that the distribution company recovers any under recovery in its
entirety. Once a customer has elected to enter into a power supply
arrangement with a nonregulated power producer, the electric distribution
company shall not be required to arrange for the standard offer to such
customer except as provided in section 39-1-27.3.1. No customer who
initially elects the standard offer and then chooses an alternative supplier
shall be required to pay any withdrawal fee or penalty to the provider of the
standard offer unless such a penalty or withdrawal fee was agreed to as part of
a contract; however, no residential customer shall be required to pay a penalty
or withdrawal fee for choosing an alternative supplier. Nothing in this
subsection shall be construed to restrict the right of any nonregulated power
producer to offer to sell power to customers at a price comparable to that of
the standard offer specified pursuant to this subsection. The electric
distribution company may not terminate an existing standard offer wholesale
supply agreement without the written consent of the division. (e) On or before January 1, 1997, each retail distribution
company shall file with the commission unbundled rates which separately
identify charges for use of transmission and distribution facilities and
provide for retail access in accordance with the schedule set forth in this
section. Such unbundled rates shall also include transition charges calculated
in accordance with section 39-1-27.4 and shall become effective on July 1,
1997. Such unbundled rates shall also include just and reasonable terms,
conditions, and procedures for interconnection with small scale generating
units located on the distribution system. If the federal energy regulatory
commission (FERC) also requires such filings, then the retail distribution or
transmission company may submit to the commission the same filing as provided
to FERC to meet the intent of this subsection. (f) (c) In recognition that electricity is an
essential service, each electric distribution company shall , within three
(3) months after retail access is available to forty percent (40%) or more of
the kilowatt-hour sales in New England, arrange for a last resort power
supply for customers who are no longer eligible to receive service under the
standard offer and not adequately supplied by the market because they are
unable to obtain or retain have left the standard offer for any reason
and are not otherwise receiving electric service from nonregulated power
producers. The electric distribution company shall periodically solicit bids
from nonregulated power producers for such service at market prices plus a
fixed contribution from the electric distribution company. Acceptance of bids
by the electric distribution company and the terms and conditions for such last
resort service shall be subject to approval by the commission. The bids
requiring the lowest fixed contribution from the electric distribution company
shall be accepted. procure last resort service supply from wholesale
power suppliers. Prior to acquiring last resort supply, the electric
distribution company will file with the commission a supply acquisition plan or
plans that include the acquisition procedure, the pricing options being sought,
and a proposed term of service for which last resort service will be acquired.
The term of service may be short or long term and acquisitions may occur from
time to time and for more than one supplier for segments of last resort service
load over different terms, if appropriate. All such components of the acquisition
plans, however, shall be subject to commission review and approval. Once an
acquisition plan is approved by the commission, the electric distribution
company shall be authorized to acquire last resort service supply consistent
with the approved acquisition plan and recover its costs incurred from
providing last resort service pursuant to the approved acquisition plan. The
commission may periodically review the acquisition plan to determine whether it
should be prospectively modified due to changed market conditions. The
commission shall have the authority and discretion to approve special tariff
conditions and rates proposed by the electric distribution company that the
commission finds are in the public interest, including without limitation: (1)
short and long term optional service at different rates; (2) term commitments
or notice provisions before individual customers leave last resort service; (3)
last resort service rates for residential or any other special class of
customers that are different than the rates for other last resort customers;
and/or (4) last resort service rates that are designed to encourage any class
of customers to return to the market. The electric distribution company's last
resort service revenues and its last resort service costs shall be accounted
for and reconciled with interest at least annually. Any over recoveries shall
be refunded and any under recoveries shall be recovered by the electric
distribution company through a uniform adjustment factor approved by the
commission. The commission shall have the discretion to apply such adjustment
factor in any given instance to all customers or to such specific class of
customers that the commission deems equitable under the circumstances provided
that the distribution company recovers any under recovery in its entirety.
Nothing in this section shall be construed to prohibit an electric distribution
company or nonregulated power producer from terminating service provided
hereunder in accordance with commission rules and regulations in the event of
nonpayment of such service. All fixed contributions and any reasonable costs
incurred by the electric distribution company in arranging this service shall
be included in the distribution rates charged to all other customers. The
commission may promulgate regulations to implement this section including
the terms and conditions upon which last resort service is offered and provided
(d) If a customer being served by a nonregulated power producer pays any taxes assessed for electric service to the electric distribution company and the electric distribution company forwards such tax payment for the power portion of the bill to a nonregulated power producer for payment by the nonregulated power producer to the state, neither the customer nor the electric distribution company shall be liable for such taxes forwarded if the nonregulated power producer fails to remit such taxes to the state for any reason.
39-1-27.6. Standards of conduct. -- (a) An electric distribution company must conduct its business to conform with the standards of conduct specified in subsections (b) through (e) of this section.
(b) (1) Except as provided in subdivision (2) of this subsection and as authorized by the commission pursuant to section 39-1-27(g), the employees of the electric distribution company engaged in distribution system operations must function independently of its employees, or the employees of any of its affiliates, who are engaged in the business of a nonregulated power producer.
(2) Notwithstanding any other provisions in this section, in emergency circumstances affecting system reliability, electric distribution companies may take whatever steps are necessary to keep the system in operation. Electric distribution companies must report to the commission each emergency that resulted in any deviation from the standards of conduct, within twenty-four (24) hours of such deviation.
(c) (1) Any employee of any affiliate of an electric distribution company who is engaged in the business of a nonregulated power producer is prohibited from: conducting distribution system operations or reliability functions; and having access to the system control center or similar facilities used for distribution operations or reliability functions that differs in any way from the access available to other nonregulated power producers.
(2) Employees engaged in either an affiliated nonregulated power producer function or an electric distribution function are not precluded from transferring between such functions as long as such transfer is not used as a means to circumvent the standards of conduct of this section. Notices of any employee transfer to or from electric distribution company operation or reliability functions must be reported to the commission. The information to be reported must include: the name of the transferring employee, the respective titles held while performing each function (i.e. on behalf of the electric distribution company and the nonregulated power producer), and the effective date of the transfer.
(3) Any employee of any affiliate of an electric distribution company who is engaged in the nonregulated power producer function must not have preferential access to any information about the electric distribution company's distribution system that is not available to all nonregulated power producers.
(4) An electric distribution company is responsible for ensuring that any employee of the electric distribution company may not disclose to employees of any affiliate engaged in a nonregulated power producer function any information concerning the distribution system of the electric distribution company or the distribution system of another (including information received from non-affiliates or information about distribution system operations, capability, price, curtailments, auxiliary services, and the like) through non-public communications that is not at the same time available to all nonregulated power producers without restriction. If an employee of the electric distribution company engaged in distribution system operations or reliability functions discloses information in a manner contrary to the requirements of the standards of conduct, the electric distribution company must immediately report such information to the commission. An electric distribution company may not share any market information, acquired from nonaffiliated, nonregulated power producers or developed in the course of responding to requests for distribution service, with any employee of an affiliate engaged in a nonregulated power producer function.
Employees of the electric distribution company engaged in
distribution system operations or reliability functions must strictly enforce
all tariff provisions relating to the sale or purchase of retail access
distribution service, if these provisions did not provide for the use of
discretion. Employees of the electric distribution company engaged in
distribution system operations must apply all tariff provisions relating to the
sale or purchase of retail access distribution service in a fair and impartial
manner that treats all customers (including the electric distribution company
and any affiliate) in a non-discriminatory manner, if these provisions involve
discretion. The electric distribution company must keep a log, available for
commission audit, detailing the circumstances and manner in which it exercised
its discretion under any terms of its tariffs. The electric distribution
company may not, through its tariffs or otherwise, give preference to purchases
or sales made on behalf of its own power customers, or those of an affiliate,
over the interests of any other customer in matters relating to the sale or
purchase of distribution service (including issues of price, curtailments,
scheduling, priority, ancillary services, and the like). If the electric
distribution company offers a discount on purchases of distribution service
made on behalf of its own power customers or those of any affiliate, then, at
the same time, it must offer to provide the same discount to all similarly
situated distribution service customers. All employees of the electric
distribution company must apply all tariff provisions in a fair and impartial
manner that treats all customers (including those of an affiliated nonregulated
power producer) in a nondiscriminatory manner. The electric distribution
company may not offer a discount on purchases of distribution service where
such discount is conditioned upon such customers purchasing power from a
nonregulated power producer that is affiliated with the electric distribution
company, nor shall an electric distribution company give preferences of any
type in the provision of distribution service for customers purchasing power
supply from a nonregulated power producer that is affiliated with the electric
(d) An electric distribution company must maintain its books of accounts and records separately from those of its affiliates and these must be available for commission inspection.
(e) The electric distribution company must maintain in a public place, and file with the commission, current written procedures implementing the standards of conduct in such detail as will enable customers and the commission to determine that the electric distribution company is in compliance with the requirements of this section.
SECTION 2. Chapter 39-1 of the General Laws entitled "Public Utilities Commission" is hereby amended by adding thereto the following section:
39-1-27.3.1. Option to return to standard offer. - (a) The commission may, notwithstanding the provisions of section 27.3, allow customers no longer eligible for standard offer service to return to standard offer service, subject to the process set forth in this section. The process shall be as follows: first, the commission shall hold hearings to determine whether there is a sufficient presence of nonregulated power producers offering reasonably priced power supply service to customers in Rhode Island. If the commission determines that such market conditions are not present, the commission shall direct the electric distribution company to prepare and file a plan that creates an option for customers to return to the standard offer including terms and conditions for customers returning and the manner in which the power supply will be procured. Such plan may include term commitments or notice provisions before nonresidential customers are permitted to leave standard offer service once they return. The commission shall conduct a hearing to review the electric distribution company's plan and issue an order approving the plan, including any modifications the commission deems appropriate.
(b) Once the plan is approved by the commission, the electric distribution company and the division shall jointly prepare a request for power supply proposals ("RFP") consistent with the commission's order, develop reasonable bidder qualification, issue the RFP, review the bids, and jointly select a winning bidder or bidders to supply power. If the electric distribution company and the division mutually agree that the bids are unreasonably high, they shall have the discretion to reject all bids and re-issue an RFP at a later date that they deem appropriate. If the electric distribution company and the division cannot agree on any matter, the dispute shall be submitted to the commission for resolution. Once the winning bidder or bidders are selected, a supply contract or contracts on terms reasonably acceptable to the distribution company and the division will be executed by the electric distribution company and no further regulatory approval shall be required. However, the results of the bidding process shall be filed with the commission.
(c) All of the costs associated with the new supply contract(s) will be recovered through standard offer rates and the electric distribution company's fully reconciling adjustment provision.
(d) The standard offer rates for the residential customers returning to the standard offer shall be the same as the standard offer rate paid by all other standard offer customers. The standard offer rates for the nonresidential customers returning to the standard offer shall be determined by the commission after the commission reviews the costs of the power supply resulting from the bid process. The rate for nonresidential customers returning to the standard offer may differ from those of other customers, if the commission deems such rate differential to be appropriate.
(e) Any customer returning to the standard offer may not enter into any agreement to use standard offer service to arbitrage the market with any supplier while such customer is on the standard offer and it shall be unlawful for any nonregulated power producer to enter into such an agreement.
(f) Nothing in this section shall be construed to create a legally enforceable entitlement for any supplier to require the electric distribution company to select any particular bid and/or sign a contract with such supplier.
(g) The requirements set forth in this section shall not apply to Pascoag Fire District or Block Island Power Company.
SECTION 3. Section 39-2-1.2 of the General Laws in Chapter 39-2 entitled "Duties of Utilities and Carriers" is hereby amended to read as follows:
Utility base rate -- Prohibition of inclusion of
advertising in base rate. -Utility base rate -
Advertising, demand side management and renewables. -- (a) In addition
to costs prohibited in section 39-1-27.4(b), no public utility distributing or
providing heat, electricity, or water to or for the public shall include as
part of its base rate any expenses for advertising, either direct or indirect,
which promotes the use of its product or service, or is designed to promote the
public image of the industry. No public utility may furnish support of any
kind, direct, or indirect, to any subsidiary, group, association, or individual
for advertising and include the expense as part of its base rate.
Notwithstanding the foregoing, nothing contained in this section shall be
deemed as prohibiting the inclusion in the base rate of expenses incurred for
advertising, informational or educational in nature, which is designed to
promote public safety conservation of the public utility's product or service.
The public utilities commission shall promulgate such rules and regulations as
are necessary to require public disclosure of all advertising expenses of any
kind, direct or indirect, and to otherwise effectuate the provisions of this
section. (b) Effective as of January 1, 1997, and for a period of ten
(10) years thereafter, each electric distribution company shall include a
charge of 2.3 mills per kilowatt-hour delivered to fund demand side management
programs and renewable energy resources. The allocation of this revenue between
demand side management programs and renewable energy resources shall be
determined by the commission. (b) Effective as of January 1, 2003, and
for a period of ten (10) years thereafter, each electric distribution company
shall include charges of 2.0 mills per kilowatt-hour delivered to fund demand
side management programs and 0.3 mills per kilowatt-hour delivered to fund
renewable energy programs. Existing charges for these purposes and their method
of administration shall continue through December 31, 2002. Thereafter, the
electric distribution company shall establish two (2) separate accounts, one
(1) for demand side management programs, which shall be administered and
implemented by the distribution company, subject to the regulatory reviewing
authority of the commission, and one (1) for renewable energy programs, which shall
be administered by the state energy office.
During the ten (10) year period the commission may, in its discretion, after notice and public hearing, increase the sums for demand side management and renewable resources; thereafter, the commission shall, after notice and public hearing, determine the appropriate charge for these programs. The energy office and the administrator of the renewable energy programs shall seek to secure for the state an equitable and reasonable portion of renewable energy credits or certificates created by projects funded through those programs. As used in this section, renewable energy resources shall mean power generation technologies that produce electricity from wind energy, small scale (less than 100 megawatts) hydropower plants that do not require the construction of new dams, solar energy, and sustainably managed biomass. Fuel cells may be considered an energy efficiency technology to be included in demand sided management programs. Special rates for low income customers in effect as of August 7, 1996 shall be continued, and the costs of all such discounts shall be included in the distribution rates charged to all other customers. Nothing in this section shall be construed as prohibiting an electric distribution company from offering any special rates or programs for low income customers which are not in effect as of August 7, 1996, subject to the approval by the commission.
(c) The director of the state energy office is authorized and shall enter into a contract with a contractor for the effective administration of the renewable energy programs funded by this section. The director shall initiate the competitive bid process by the issuance and advertisement of specifications and request for proposals, on or before September 1, 2002. The contract resulting from the competitive bid process shall be awarded to become effective for a three (3) year period commencing no later than January 1, 2003. A competitive bid and contract award for administration of the renewable energy programs shall occur every three (3) years thereafter.
SECTION 4. Chapter 39-2 of the General Laws entitled "Duties of Utilities and Carriers" is hereby amended by adding thereto the following section:
39-2-1.4. Reasonable backup or supplemental rates. -- (a) Electricity produced by cogeneration and small power production can be of benefit to the public as part of the total energy supply of the entire electric grid of the state or consumed by a cogenerator or small power producer. Subject to compliance with applicable rules governing such service, public utilities shall provide transmission or distribution service to enable a retail customer to transmit electrical power generated by the customer at one (1) location to the customer's facilities at another location, if the commission finds that the provision of this service, and the charges, terms, and other conditions associated with the provision of this service, are not likely to result in higher cost electric service to the utility's general body of retail and wholesale customers or adversely affect the adequacy or reliability of electric service to all customers.
(b) Each electric distribution company shall provide backup and supplemental service to any customer who is self-generating electricity and meets reasonable interconnection requirements designed to protect the distribution and transmission system. The commission shall ensure that such backup and supplemental rates made, exacted, demanded or collected by any public utility from a customer who is self-generating shall be just and reasonable and may not be unduly discriminatory. Any backup and supplemental rate tariffs in effect as of May 2002 may remain in effect as designed through December 31, 2004. Commencing January 1, 2005, the backup and supplemental rates shall be cost based but may be discounted as provided for in paragraph (c) below.
(c) Notwithstanding the rate design criteria set forth in paragraph (b) above, the commission may permit or require discounted backup distribution service rates in order to encourage economically efficient cogeneration or small power production projects if it finds such discounts to be in the public interest, provided, however, that any revenue not recovered by the electric distribution company as a result of such discounted distribution rates shall be accounted for and recovered in the rates assessed on all customers. The commission shall, in determining the public interest in distributed generating facilities, consider reduced environmental impacts, increased energy efficiency, reduced transmission losses and congestion, effects on electric system reliability and other factors the commission may deem relevant.
(d) The provisions of this section shall be effective as of January 1, 2005.
SECTION 5. Chapter 39-3 of the General Laws entitled "Regulatory Powers of Administration" is hereby amended by adding thereto the following sections:
39-3-1.2. Aggregation of electrical load by municipality or group of municipalities. - (a) The legislative authority of a municipality may adopt an ordinance or resolution, under which it may aggregate in accordance with this section one or more classes of the retail electrical loads located, respectively, within the municipality or town and, for that purpose, may enter into service agreements to facilitate for those loads the sale and purchase of electricity. The legislative authority also may exercise such authority jointly with any other such legislative authority. An ordinance or resolution under this section shall specify whether the aggregation will occur only with the prior consent of each person owning, occupying, controlling, or using an electric load center proposed to be aggregated or will occur automatically for all such persons pursuant to the opt-out requirements of this section. Nothing in this section, however, authorizes the aggregation of retail electric loads of an electric load center that is located in the certified territory of a nonprofit electric supplier or an electric load center served by transmission or distribution facilities of a municipal electric utility. If an ordinance or resolution adopted under this section specifies that aggregation will occur automatically as described in this section, the ordinance or resolution shall direct the board of canvassers to submit the question of the authority to aggregate to the electors of the respective municipality or town at a special election on the day of the next primary or general election in the municipality or town. The legislative authority shall certify a copy of the ordinance or resolution to the board of canvassers not less than seventy-five (75) days before the day of the special election. No ordinance or resolution adopted under this section that provides for an election under this section shall take effect unless approved by a majority of the electors voting upon the ordinance or resolution at the election held pursuant to this section.
No legislative authority pursuant to an ordinance or resolution under this section that provides for automatic aggregation as described in this section, shall aggregate the electrical load of any electric load center located within its jurisdiction unless it in advance clearly discloses to the person owning, occupying, controlling, or using the load center that the person will be enrolled automatically in the aggregation program and will remain so enrolled unless the person affirmatively elects by a stated procedure not to be so enrolled. The disclosure shall state prominently the rates, charges, and other terms and conditions of enrollment. The stated procedure shall allow any person enrolled in the aggregation program the opportunity to opt-out of the program every two (2) years, without paying a switching fee. Any such person that leaves the aggregation program pursuant to the stated procedure shall default to the last resort service until the person chooses an alternative supplier.
A governmental aggregator under this section is not a public utility engaging in the wholesale purchase and resale of electricity, and the aggregated service is not a wholesale utility transaction. A governmental aggregator shall be subject to supervision and regulation by the commission only to the extent of any competitive retail electric service it provides and commission authority.
A town may initiate a process to authorize aggregation by a majority vote of a town meeting or of the town council. A city may initiate a process to authorize aggregation by a majority vote of the city council, with the approval of the mayor, or the city manager. Two (2) or more municipalities may as a group initiate a process jointly to authorize aggregation by a majority vote of each particular municipality as herein required.
Upon the applicable requisite authority under this section, the legislative authority shall develop a plan of operation and governance for the aggregation program so authorized. Before adopting a plan under this section, the legislative authority shall hold at least two (2) public hearings on the plan. Before the first hearing, the legislative authority shall publish notice of the hearings once a week for two (2) consecutive weeks in a newspaper of general circulation in the jurisdiction. The notice shall summarize the plan and state the date, time, and location of each hearing. A municipality or group of municipalities establishing load aggregation pursuant to this section shall, in consultation with the commission, develop a plan, for review by its citizens, detailing the process and consequences of aggregation. The plan shall identify which classes of customers may participate, based on their applicable electric distribution company tariff or rate schedule. Any municipal load aggregation plan established pursuant to this section shall provide for universal access to all applicable customers and equitable treatment of applicable classes of customers and shall meet any requirements established by law or the commission concerning aggregated service. Said plan shall be filed with the commission, for its final review and approval, and shall include, without limitation, an organizational structure of the program, its operations, and its funding; methods of establishing rates and allocating costs among participants; the methods for entering and terminating agreements with other entities; the rights and responsibilities of program participants; and termination of the program. The plan must also include the terms and conditions under which retail customers who have chosen to opt-out of the aggregated service may take service from the aggregated entity. Prior to its decision, the commission shall conduct a public hearing. Following approval of said plan, the legislative authority may solicit bids from nonregulated power producers pursuant to the methods established by the plan. The legislative authority shall report the results of this solicitation and proposed agreement awards to the commission, which shall have five (5) business days in which it may suspend such awards if the solicitation or awards are not in conformance with the plan or if the cost for energy would in the first year exceed the cost of that energy on the standard offer, as established pursuant to this chapter, for citizens in the municipality or group of municipalities, unless the applicant can demonstrate that the cost for energy under the aggregation plan will be lower than the standard offer in the subsequent years or the applicant can demonstrate that such excess cost is due to the purchase of renewable energy as described by the commission. If the commission does not suspend the proposed contract awards within five (5) business days of filing, the legislative authority shall have the right to award the proposed agreements.
Any retail customer in a municipality with an approved aggregation plan may elect instead to receive retail supply from another licensed retail supplier or from the local distribution company. Within thirty (30) days of the date the aggregated entity is fully operational, ratepayers who have not affirmatively elected an alternative authorized supplier shall be transferred to the aggregated entity subject to the opt-out provision herein. Following adoption of aggregation as specified above, the program shall allow any retail customer to opt-out and choose any supplier or provider such retail customer wishes. Nothing in this section shall be construed as authorizing any city or town or any municipal retail load aggregator to restrict the ability of retail electric customers to obtain or receive service from any authorized provider thereof.
It shall be the duty of the aggregated entity to fully inform participating ratepayers in advance of automatic enrollment that they are to be automatically enrolled and that they have the right to opt-out of the aggregated entity without penalty. In addition, such disclosure shall prominently state all charges to be made and shall include full disclosure of the standard offer rate, how to access it, and the fact that it is available to them without penalty, if they are currently on standard offer service. The commission shall furnish, without charge, to any citizen a list of all other supply options available to them in a meaningful format that shall enable comparison of price and product.
(b) The commission shall promulgate rules by which the legislative authority may request information from the electric distribution company or companies whose customers would be included in its plan. Such rules shall ensure that municipalities have reasonable and timely access to information pertinent to the formation of the plan and solicitation of bids to serve customers, that confidentiality of individuals is protected, that charges for production of such data are reasonable and not unduly burdensome to the legislative authority.
SECTION 6. This act shall take effect upon passage.